RBS must sell W&G as a condition of returning excess capital and dividends to investors. The bank is still almost three-quarters owned by the British government, despite the government gradually selling off small portions of the bank in the past two years.

According to The Telegraph, RBS and the PRA have held discussions about the authority potentially launching a “skilled persons report, also known as a section 166 report” should RBS manage to sell Williams & Glyn to either challenger bank Clydesdale, or FTSE 100-listed Santander.

The business includes around 1.8 million personal banking customers and 250,000 small business accounts, but as it stands, neither Clydesdale or Santander is willing to purchase the entirety of the unit.

The Telegraph’s report suggests that any potential inquiry could centre on RBS’ current failures to sell the whole of the Williams & Glyn business, as well as the likely IT issues that could occur in the event of the sale.

“None of the proposals under discussion can deliver full separation and divestment by 31 December 2017. RBS is therefore in discussion with HM Treasury, and expects further engagement with the European Commission, to agree a solution with regards to its State Aid obligations.”